California home prices fell by the biggest margin in the nation for a 19th straight month in November, according to First American CoreLogic’s latest monthly Home Price Index.
Prices here fell 25.9% from the year before as of late November, figures show.
The state has led the nation in percentage drops in home prices consistently since May 2007, the latest data show. The next worst price drops in November were in Nevada (down 25.2%), Arizona (down 18.6%) and Florida (down 17.4%), all states that had the biggest price gains during the housing boom.
Nationwide, prices were down 9.6% from the year before, with home prices falling in 39 states and climbing in 11. The three biggest price gains occurred in Louisiana (up 2.4%), New York (3.5%) and West Virginia (6.16%).
On the other hand, California prices appear to be falling less steeply, First American figures show, down from a peak drop of 30.4% in August. Prices have been falling at 27% or more since April.
In Orange County, median prices for a single-family detached home fell 17.4% as of late November — the smallest percentage drop in at least six months — said First American CoreLogic, a subsidiary of Santa Ana-based First American Corp.
Our Eyeball 2009 housing forecast Q&As …
- Consultant eyes flat-at-best O.C. housing market
- Realtor group prez eyes housing’s opportunities
- Pimco’s Simon eyes O.C. home price bottom in late 2009
- Outgoing Realtor prez eyes O.C. rebound by summer
- Tell us what O.C. home prices will do in 2009
In other real estate news …
- 8 million foreclosures seen through 2012
- 44% of O.C. home resales were foreclosures
- Housing in O.C. beach towns slumps, sales off 28%
- Bay Area home prices plummet 44% to 2000 levels
- CA distress sales triple in ‘08
- O.C.’s newest beachfront listing: $36.9 million
- CA banks drop protection against bad loans
- Mortgage aid scheme a failure
- POLL: Is 1,287-sq. ft. house on busy street worth $508k?
- Renovating in the recession? A Realtor’s warning
In other business news …
- Hines Horticulture bought by private equity firm
- Unisys lays off 40 in Mission Viejo
- O.C. unemployment rate hits 14-year high
- O.C. auto executive pleased by bailout
- Microsemi contests U.S. anti-trust lawsuit
- Ingram Micro asks workers for voluntary “Winter Break”
- KB Toys going out of business
- Office Depot closing 19 stores in West
- Circuit City plans to close O.C. store
- Chipotle, Buffalo Wild Wings opening at new O.C. retail center
- Solarflare gets $44 million in private funding
- Last-minute holiday shopping deadlines - some offer free shipping
Good areas of “California” down 10-15%. IE, Stockton, Palmtucky down 40-50%.
Yeah, it looks like bad areas are getting close to fundamentals. Good areas will probably have a worse year this year than bad areas.
Lee’s definition of fundamentals = the price that will allow him to buy a nice SFR in OC on his $40K a year salary.
Shockg,
Could you be real for one second?
Prices around the entire nation are dropping because people like you were able to bid prices up using liar loans that you had no intention of repaying.
You are not even qualified to own a home on your salary.
This isn’t a one man issue like your delusional mind likes to perceive it to be, it’s a national nightmare complements of deceitful people like yourself.
Your house is riding on the backs of tax payers like Brain and you have the stupidity to bite the hand that feeds you?
I suggest you go back to school and pay for your own house instead of freeloading off of your neighbors!
realtors are retards
I like that Shockg comes on as first post in his attempt to manipulate us in to thinking that areas like IE and Central Valley are the only ones affected. Hey, Shockg find a home on Redfin that is getting peak dollar and then you can tell us were wrong. The supposed high end, the ones that we’re getting 800K and above for 30+ year old termite ridden fixers are not evening getting 500K. Here’s the reality: The move up market is dead, the second mortgage market is dead = you need big down payments in cash, no refis for liars/no docs, major recession, job insecurity, loss of down payment from stock market crash and very high DTI loads for possible market targets. All of that equals, big losses for the supposed high end and this time next year we’ll be seeing lower median but it won’t be because of supposedly bad areas of OC. Keep posting Shockg that way you won’t go postal on us.
shockg-
how do you determine a proper price point in the beach areas? I’m not talking CDM where there’s been old money - but san clemente, dana point, huntington.. ‘normal’ beach areas - the prime areas that are not known to cost multimillions.
so what say you? can you look at OC median + X%? how about zip code demographics and do a multiplier of median income -> median home price? local rent * X = price?
there has to be some kind of fundamentals. you constantly crap on other people for trying to use fundamentals, so what in your opinion, is THE way to measure?
10 Worst Real Estate Markets for 2009
1. Los Angeles
2009 projected change: -24.9%
2010 projected change: -5.1%
3. Riverside, Calif.
2009 projected change: -23.3%
2010 projected change: -4.8%
6. Santa Ana-Anaheim
2009 projected change: -22.0%
2010 projected change: -3.5%
8. San Diego
2009 projected change: -21.1%
2010 projected change: -2.9%
http://finance.yahoo.com/real-estate/article/106346/10-Worst-Real-Estate-Markets-for-2009
OC in the top 10 worst
What were saying shockg?
# shockg Says:
December 22nd, 2008 at 6:45 pm
“Lee’s definition of fundamentals = the price that will allow him to buy a nice SFR in OC on his $40K a year salary.”
How beautifully ironic you should say this. This is YOUR definition of fundamentals, not any bear’s definition.
During the housing bubble (which you seem to think was a GOOD thing and SHOULD HAVE happened), what you describe here is EXACTLY the sort of thing that was happening! People making $40K per year were getting into $500K houses!
The fact is that people making $40K per year should not be buying even $200K homes, much less a “nice SFR in OC.” Unless they have a big down payment. I’ll personally be happy when reasonable fundamental prices between 3x - 5x median income is reached depending on zip code.
watch 2010 home for sale in oc 1500 sg jt 169.000 or best offer
How do you bears answer the following obstacles to significant price drops. If your answer makes sense, I will accept your reasoning:
- Low inventory levels right now (almost three year low)
- Upcoming Govt intervention through (Mandatory workouts or expanded Bankruptcy judges powers to write down loans)
- Lenders beginning to modify loans (materially) for the first time. (not just a cosmetic change like 2008 causing re-defaults.
- Massive stimulus package with the new administration to offsett job losses.
- Govt finally recognizing the housing down turn as a national security issue and throwing everything into it to reduce new foreclosures drastically.
- Affordability levels at 7 year high.
After all is said and done, it’s an issue of supply and demand. If they choke off the new foreclosures significantly and the demand gets better as the confidence comes back with the economy in Spring 2009, with the current rates. How can the prices not stabilize?
At some point, investors earning 2% on CD’s will pour into the market
to buy RE to protect their money against upcoming inflation.
All your calculations for a price drop is based on # of foreclosures. Do you ever ask yourself what happens to your theory if these foreclosures are stopped or significantly reduced?
I guarantee you that the job losses will NOT cause a big spike in foreclosures as the lenders are desparate and will work with them.
Remember everyone, that shockg bought in Brea in 2005. Seriously, go check the archives, and you will see the truth.
He wants micro and more “localized” focused stats. Anyone want to find some 30% losses in Brea? It shouldn’t be difficult, and it won’t be just condos. Maybe… someone can do the math of how many years it would take to recover a 30% loss with a nominal appreciation rate of 5%, but adjusting it for inflation. Then everyone will understand why shockg is so bitter and angry towards us bears. Losing 30% or more on your home sucks, and to have the people that have been right while you have been wrong for the entire time, sucks even more.
Oh… and Shane, are you serious? Or have you not taken a econ 101 class at one of the many community colleges here in OC? If you haven’t taken econ 101, then I suggest you do. Otherwise you just can’t be taken seriously, because what you say has to be a joke.
This proves that California is the most vulnerable states as far as real estate market is concern, thank god I did not buy real estate in California three years back.
Graphrix, I took an econ class 25 years ago, and I remember next to nothing, but common sense tells anyone that the typical bases for the real estate agents optimism posting here are not to be looked at in a vacuum…
For example, “low inventory.” Ever think that it matters WHY inventory is low? Look back at the Great Depression. Inventory very low at times b/c no one can buy or afford to sell. So is that a “good sign” for a rebound? Seriously, savvy folks are not buying or selling now unless the deal is so good it would be as good of a deal in two years of declining values. Otherwise, there is too much risk. So the inventory is low (like where I am in Newport) because no one wants to sell at the prices the market is dictating right now, and no one wants to buy the few overpriced homes on the market. THAT is what is making inventory low. But those 5 houses in my hood that are for sale are sitting there rotting. That can’t be a bellweather of good tidings.
Speaking of which, happy holidays to all no matter what side of the fence you are on, and hopefully this next year won’t be as bad as it looks on everyone.
Shane:
The answer to your question(s) is that, regardless of the stats you mention, the median income cannot support the median price…..not even close. And with no-docs and even 80/20’s no longer available, OC’s supply of buyers has dropped exponentially more dramatically than inventory.
Further, employement in OC is extremely low and will get worse….the financial instutions that have supported us over the past 10 years are not getting better anytime soon.
Prices will drop another 20-25% in 2009 and flatten in 2011-2012.
shane - that is still an artificial market.
The NAR just released their existing home sales numbers and I noticed that they have become very pessimistic.
Why would they do that? Very simple, they are now trying to scare Congress into adding more house buying incentives in their stimulus package. The know that the have to paint a horrible picture to get something out of Congress.
Let’s talk fundamentals. If you did not buy ten years ago when cottages in premium beach locations were priced less than a current ghetto foreclosure and money was easy, you blew it. That was the investment opportunity of a lifetime, and you were MIA. Those are the fundamentals.
“…you blew it.” For the vast majority of people who read/contribute here, we were not old enough to buy in CdM (rather, the “old folks zone”) 10 years ago, and/or were not living in CA, and/or had/have no interest in living in an area where houses are a few feet apart like CdM. J2, you have nothing more to contribute than to repeat yourself countless times, the same old canard about those who didn’t buy in CdM ten years ago “missed the opportunity of a lifetime.” Get over it - -no one but you thinks that CdM is “living,” much the same way that those who buy a designer handbag have actually “arrived.” CdM is clearly “off topic.”
Jimmy2, LOL …. spitting into the wind again.
Still playing internet make-believe games with your ‘own beach prop’ stories.
Isn’t the internet great? LOLLL!!!! You can be anything you want.
Just think. Those ghetto foreclosures with price tags higher than beach cottages ten years ago are selling fast. Very very fast. So fast that it is hard to get your offer in. This means your wish for the great “income leveling” and “wealth leveling” socialist dream will never come true.
# Jimmy2 Says:
December 23rd, 2008 at 8:12 am
“Let’s talk fundamentals. If you did not buy ten years ago when cottages in premium beach locations were priced less than a current ghetto foreclosure and money was easy, you blew it. That was the investment opportunity of a lifetime, and you were MIA. Those are the fundamentals.”
Speaking of fundamentals, why do you fight against the plankton theory: without first time buyers, the RE class dies. Just like Rome, if OC RE insists on barricading itself the outside world, its gates will come crashing down.
Plankton theory? I believe in the low IQ theory. Low IQ types watch prices skyrocket while spitting out the “fundamentals are wrong” so “they are waiting”. Low IQ types told me this in the 90s … how dumb I was to ignore the fundamentals and purchase beach close properties in the 4s and 5s. By the way, that is not 4M and 5M, but 400K and 500K. Then, the low IQ people jump in after the price skyrocket, and purchase in an undesirable location. They loose the property, go back to renting, then blog and tell everyone how the end is here while ignoring deals in real estate.
Your right Jimmy,
Im still kicking myself for not buying up a bunch of swamp land near Orlando in the early 1960’s for around $100 an acre. This area is now known as Disney World….there is only a small problem, I was -7 or so at the time.
As the saying goes hindsight is 20/20. Most of us here like to talk about where the market is headed….you want to kick us for not buying the first superman comic book or elmo doll while your at it?
Shane,
The reality in all numbers being reported as sales right now are all taking place in the conforming market. I talked to mortgage person who has worked the market for well into 20 years in high value zipcodes and she hasn’t done a jumbo purchase in 5 months. The underwriting on jumbos is going to cause all homes to try to fit into conforming limits. That’s why we are headed for much more crashing in the 600 and up price range.
It’s really VERY simple economics…
The problem is not the FALL in prices, but in the artificial RISE in prices. And the rise was due to very EASY credit. That easy credit increased people’s ability to pay more for the house, which lead to prices RISING. Investors procured the risky loans, feverishly, and the problem continued, and continued (irresponsibly long).
That Said…
Prices will continue to CORRECT back to 1998 levels - AND they may artificially bump below that to maybe 1997 levels for a short time. Prices will roll along for a decade, or so, in the 1998 - 2001 levels.
My opinion, of course.
Jimmy, do you even read the junk you write? I mean, seriously, one trick pony.
Please inform us of other awesome business/investment decisions you’ve made in the last 10 years. Because you are obviously a guru of knowledge and if you were smart enough to buy up a dozen CdM properties, it probably also means you were a venture capitalist on firms like Google, got out of tech stocks right before the dot com bust, and personally brought over tart froyo to the US.
You just sound like an older Casey Serin. Except snowflake has left the internet, while you still are here.
But the NAR said o the radio that on average a house doubles in value every ten years? Why would they lie? What would they have to gain?
Jimmy2 Says:
December 23rd, 2008 at 9:03 am
“Plankton theory? I believe in the low IQ theory. Low IQ types watch prices skyrocket while spitting out the ‘fundamentals are wrong’ so ‘they are waiting’. Low IQ types told me this in the 90s … how dumb I was to ignore the fundamentals and purchase beach close properties in the 4s and 5s.”
Have we reached a bottom for even premium RE? If so, how many properties are you buying now?
“By the way, that is not 4M and 5M, but 400K and 500K. Then, the low IQ people jump in after the price skyrocket, and purchase in an undesirable location. They loose the property, go back to renting, then blog and tell everyone how the end is here while ignoring deals in real estate.”
So are you saying that the low I.Q. people include Wall Street bosses for facilitating toxic loans to all income classes? Were premium properties immune from such idiocy?
You didn’t have to be very intelligent to know in 2004 something was very, very wrong in the Real Estate Market. Smart people could see the day was fast approaching that there would be no buyers. Many of my neighbors lived high on the hog believing somehow they had arrived, that they were people of wealth and position. Home equity loans fueled the economy not Bush tax cuts for the rich. Home equity allowed people to live in a fantasy world or Hummers, granite counter tops and smart outfits.
We saw the writing on the wall. In 2006 we should our house and walked away with, in cash with more than 137% of what we paid in 2002. Tax free mind you. We retired to ABQ and paid cash for a bigger house. We are on easy street and all the fools who believed in all the hype that they too could be the lucky ones are deep in debt with 15-30 year home equity loans for Hummers, smart outfits and such things that will be gone in 5 years. Their greed is to blame for the mess we find ourselves in. They were sweet pickings for the criminals in real estate and on wall street.
Merry Christmas everyone! By everyone, yes I do mean to include shockg and shane…
Shane Says:
How do you bears answer the following obstacles to significant price drops. If your answer makes sense, I will accept your reasoning:
- Low inventory levels right now (almost three year low)
inventory levels are the symptom, they are not the problem. high inventory is the result of asking prices being higher then what buyers are willing and able to pay. dropping inventory levels are the result of forced sales such as foreclosures and lower prices. the prices that buyers are able to afford are the result of local incomes and employment rates.
- Upcoming Govt intervention through (Mandatory workouts or expanded Bankruptcy judges powers to write down loans)
the government intervention has been happening all year and it is not working. even if judges right down loans, that will simply mark houses down to market, just like a foreclosure. future buyers will still only be able to afford what their incomes allow.
- Lenders beginning to modify loans (materially) for the first time. (not just a cosmetic change like 2008 causing re-defaults.
lenders have been modifying all year, as mentioned above, this will do nothing to keep prices from sliding. house prices will stop falling when house prices are affordable.
- Massive stimulus package with the new administration to offsett job losses.
there have been massive stimulus packages all year. Bush’s tax stimulus, the 700B TARP + other Fed reserve lending facilities (2+T in all). the problem isn’t a lack of “stimulus”, the problem is too much debt and too much spending, and asset values that are too high. more “stimulus” will eventually result in higher borrowing rates (mortgage rates), simply pushing the problems out into the future.
- Govt finally recognizing the housing down turn as a national security issue and throwing everything into it to reduce new foreclosures drastically.
slowing down foreclosures will not stop price declines, it will just keep houses on the market without any buyers. (raise inventory levels)
- Affordability levels at 7 year high.
the may be so, but still unaffordable by historical standards. i would look to 3x local income to be a historical average. and we may also fall below the average for some time.
After all is said and done, it’s an issue of supply and demand. If they choke off the new foreclosures significantly and the demand gets better as the confidence comes back with the economy in Spring 2009, with the current rates. How can the prices not stabilize?
At some point, investors earning 2% on CD’s will pour into the market
to buy RE to protect their money against upcoming inflation.
this is not an issue of “confidence” or “stabilization”, the issue is that demand was driven up by wreckless lending. this lending has disappeared and will not come back anytime soon if ever. those that took part are licking their wounds. the new lack of this wreckless lending is called demand destruction. buyers that were able to buy 500k houses with 50k incomes can and will no longer be able to do so, nomatter the “confidence” or how “stabilized” the market is.
All your calculations for a price drop is based on # of foreclosures. Do you ever ask yourself what happens to your theory if these foreclosures are stopped or significantly reduced?
if foreclosers are stopped, inventory goes up, but prices continue to fall as buyers still can’t afford overpriced houses that are sitting on the market unsold. eventually sellers give in. nobody ever NEEDS to BUY a house, but with divorce, job loss, retirement, relocation, marrage etc, people oftern NEED to SELL
I guarantee you that the job losses will NOT cause a big spike in foreclosures as the lenders are desparate and will work with them.
whether a house is foreclosed on or not. if less people are employed, aggregage income in a neighborhood goes down, and this will lower the amount new buyers can afford to pay, (lower the price) in a neighborhood.